There are no changes to the text of paragraph (e)(3) as proposed. Amended paragraph (e)(3) allows a service that is not included on Medicare's List, or on the commission's List at paragraph (e)(2), to be performed in an ASC by prospective agreement between the carrier, the doctor, and the ASC, occurring before, during, or after preauthorization. This will allow ASCs the opportunity to present to carriers the cost effectiveness of performing certain procedures in an ASC setting, which currently are not on Medicare's List or on the commission's List at paragraph (e)(2). Details that must be included in an agreement are specified to minimize disputes, which add costs to the system and drain the commission's resources. Flexibility in the process is provided to allow use of the timing and manner of negotiation that suits the particular case.

There are no changes to the text of paragraph (e)(4) as proposed. Amended paragraph (e)(4) allows a separate reimbursement for surgically implanted, inserted, or otherwise applied devices at the lesser of the manufacturer's invoice amount or the net amount (exclusive of rebates and discounts) actually paid for such device to the manufacturer by the ASC. Reimbursement for the cost of medical supplies related to the surgical procedure is included in the group case rate payment and is not included under this provision. The ASC is required to certify that the billed amount meets this standard, using specific certification language provided in the proposed paragraph.

The amendment providing reimbursement for implantables is a targeted approach to address situations where the cost of an implantable, by itself, exceeds the ASC group case rate or the MFG rate allowed in the workers' compensation system. Assuring sufficient reimbursement for these specific items enhances access to ASC services for injured workers. Although the Medicare system includes limited additional reimbursement for implantables, it was generally accepted in the ASC Focus Group meetings that orthopedic procedures were performed relatively infrequently in an ASC setting for the Medicare population. The limited Medicare reimbursement for high-cost, high-tech implantables associated with orthopedic procedures was cited as a primary reason for this suppressed utilization. The information provided by some of the ASC Focus Group members highlighted the high-cost of surgically implanted devices due to technology advances and medical cost inflation. The amended rule enhances consistency of reimbursement for surgically implanted devices by implementing a cost-based reimbursement, similar to the inpatient hospital methodology.

This fee guideline requires that provider billing must include a certification statement that the amount sought represents its actual costs (net amount, exclusive of rebates and discounts). This information should facilitate the billing process by providing cost information with the original billing. Consequently, processing times should improve, and confusion related to implant costs should decrease, which should additionally decrease the opportunity for disputes. The implant cost certified by the ASC is subject to insurance carrier or commission audit and verification.

There are no changes to the text of subsection (f) as proposed. Amended subsection (f) references that insurance carriers may conduct audits under §133.302 and §133.303 (relating to Preparation for an Onsite Audit and Onsite Audits) if they wish to challenge whether the certified amount referenced in subsection (e)(4) of these proposed amendments actually reflects the standard given in that subsection. Also, it is reiterated that the Medical Dispute Resolution process under §133.307 (relating to Medical Dispute Resolution of a Medical Fee Dispute) may be a forum where disputes concerning the certified amount under subsection (e)(4) are argued.

The ability to audit is an important check and balance feature related to reimbursement of the invoice cost. The audit allows the carrier to verify the actual cost of an item and auditing and assists the commission in the statutory requirements related to effective medical cost control. Additionally, members of the ASC Focus Group agreed that auditing was an acceptable trade off when combined with additional reimbursement.

Former subsection (f) concerning severability is now subsection (g), and there are no changes to the text of subsection (g) as proposed.

Comments generally supporting amendments to §134.402 as proposed were received from the following groups: Central Park Surgery Center; Clear Fork Surgery Center; East Houston Surgery Center; Medtronics; Northeast Baptist Surgery Center; NorthStar Surgical Center; Surgery Center of Duncanville; Symbion; Texarkana Surgery Center; and Texas Mutual Insurance Company.

Comments generally opposing or concerned with amendments to §134.402 as proposed were received from the following groups: Alamo Heights Surgery Center; Ambulatory Surgery Association of Texas; Ambulatory Surgery Center of Tyler; American Insurance Association; Calallen Orthopaedics L.L.P.; Christus, Santa Rosa Surgery Center; Corpus Christi Outpatient Surgery; Dallas Anesthesiology Association; Dallas Surgical Partners; Denton Surgicare; Doctors Outpatient Surgicenter; Flahive, Ogden & Latson; Garland Eye Associates, P.A.; Genesee Affiliates; Grapevine Surgicare; Heath SurgiCare; Insurance Council of Texas; Kirby Surgery Center; MacArthur Surgery Center; Mary Shiels Hospital; Memorial Herman Surgery Center Northwest; Memorial Northwest Otolaryngology; Metroplex Surgicare; North Texas Surgery Center; Northwest Houston Surgical Association; Park Cities Surgery Center; Property Casualty Insurers Association of America; San Marcos Surgery Center; Shannon Surgery Center; Smith & Nephew; South Austin Surgery Center; Southwest Podiatry, LLP; Specialty Surgery and Pain Center; Surgery Center of Arlington; Surgery Center of Lewisville; Texan Surgery Center; Texas Ambulatory Surgery Center Society; Texas Association of Business; Texas Mutual Insurance Company; Texas Sports Medicine and Orthopeadic Group; The Austin Diagnostic Clinic; The Urology Institute; United Surgery Center Southeast; United Surgical Partners International; and Valley View Surgery Center.

Comments neither generally supporting nor opposing amendments to §134.402 as proposed, but suggesting changes or asking questions were received from the following groups: Ambulatory Surgery Association of Texas; Alamo Heights Surgery Center; Ambulatory Surgery Center of Tyler; Calallen Orthopaedics, L.L.P.; Central Park Surgery Center; Christus; Santa Rosa Surgery Center; Clear Fork Surgery Center; Corpus Christi Outpatient Surgery; Dallas Anesthesiology Associates; Dallas Surgical Partners; Denton Surgicare; Doctors Outpatient Surgicenter; East Houston Surgery Center; Foundation West Houston Surgery Center; Foundation Surgery Affiliates; Garland Eye Associates, P.A.; Genesee Affiliates; Grapevine Surgicare; HealthSouth Corporation; Heath Surgicare; Heritage Eye Center; Insurance Council of Texas; La Vista Solutions, LLC; MacArthur Surgery Center; Mary Shiels Hospital; Medtronics; Memorial Herman Surgery Center Northwest; Memorial Northwest Otolaryngology; Metroplex Surgicare; Mirage Medical Group; North Texas Surgery Center; Northeast Baptist Surgery Center; NorthStar Surgical Center; Northwest Houston Surgical Association; Orthopedic Surgery Pavilion; Park Cities Surgery Center; San Marcos Surgery Center/Kirby Highland Lakes Surgery Center; Shannon Surgery Center; Smith & Nephew; South Austin Surgery Center/San Marcos Surgery Center; Southwest Podiatry, LLP; Special Surgery of Houston; Specialty Surgery and Pain Center; Surgery Center of Arlington; Surgery Center of Duncanville; Surgery Center of Lewisville; Surgical & Diagnostic Center; Symbion; Texan Surgery Center; Texarkana Surgery Center; Texas Ambulatory Surgery Center Society; Texas Association of Business; Texas Mutual Insurance Company; Texas Sports Medicine and Orthopeadic Group; The Austin Diagnostic Clinic; The Clinic for Special Surgery; The Urology Institute; United Surgery Center Southeast; United Surgical Partners; United Surgical Partners International; Valley Baptist Medical Center; Valley View Surgery Center; and Whitley Penn.

Summaries of the comments and commission responses to the proposed rule amendments are as follows:

Subsection (a)

COMMENT: Commenters recommended the rule amendments be retroactive to the original rule effective date, September 1, 2004. Commenters stated that this practice of implementing retroactive changes is often used by the Centers for Medicare and Medicaid Services (CMS) when adjustments are made to Medicare's physician fee schedule. This would allow ASCs to more easily transition and recover some of the costs associated with the original rule change.

RESPONSE: The commission disagrees with commenters' recommendation to apply a retroactive date to this amended rule. Many commenters requested that these amendments be retroactive to September 1, 2004, which was the effective date of the original rules. The commission declines to make this change. The commission notes that the Texas Constitution states that "no bill of attainer, ex post factor law, retroactive law, or any law impairing the obligation of contracts, shall be made" [Tex. Const., Art. I, Sec.16]. As a matter of policy, the commission believes that system participants involved in the ASC reimbursement rate issue need to be able to know what rates are in effect at any given time so that informed decisions can be made regarding matters like whether appeals are pursued during billing processing and during medical dispute processes. Also, it is likely that retroactive application of these amendments would lead to increased disputes due to retroactive adjustments.

Subsection (b)

COMMENT: Commenter recommended that the American Academy of Orthopedic Surgeons (AAOS) Complete Global Surgery Data be the standard for application of the multiple procedure rule.

RESPONSE: The commission disagrees there is a need to recognize AAOS Complete Global Surgery Data to be the standard for application of the multiple procedure rule. Adoption of AAOS Complete Global Surgery Data would contradict the CMS National Correct Coding Initiatives (NCCI) and would apply a different set of rules to ASCs and surgeons paid under the MFG.

Subsection (d)

COMMENT: Commenter recommended adding "billed amount" since requiring carriers to pay more than the billed amount does not achieve the objective of cost control. Commenter recommended deleting the "lesser of" provision and requiring reimbursement to be either the MAR or a negotiated rate.

RESPONSE: The commission disagrees with the recommendations. The CMS prospective payment methodology is based on a case rate concept, which recognizes that at times reimbursement will likely be different than the billed amount. Sometimes this reimbursement will be less than, sometimes more than, the billed amount. This concept encourages the efficient delivery of care without an unnecessary utilization of resources. The commission disagrees that the "lesser of" provision should be deleted from the rule. This provision facilitates cost control by setting an upper limit on reimbursement.

Subsection (e)(2)

COMMENT: Commenter generally supported the added procedures codes, and stated, "we are pleased to see that TWCC added some non-covered codes that the Medicare methodology did not have."

RESPONSE: The commission agrees that the proposed amendments of subsection (e) are an appropriate amendment to the rule.

COMMENT: Commenters recommended CPT code 76005 be added to the commission's List of procedures to be performed in an ASC, and be placed in Medicare's Group 9. Other commenters recommended CPT code 76005 be added and placed in Medicare's Group 1, in part due to the CMS NCCI edits, and because it requires the use of the most costly piece of ASC equipment, a C-arm, which is commonly used on injured workers. CPT code 76005 is defined as "fluoroscopic guidance and localization of needle or catheter tip for spine or paraspinous diagnostic or therapeutic injection procedures (epidural, transforaminal epidural, subarachnoid, paravertebral facet joint, paravertebral facet joint nerve or sacroiliac joint), including neurolytic agent destruction." Commenter recommended CPT code 76005 be used in lieu of proposed CPT code 76000. Other commenters opposed the proposed inclusion of CPT code 76000 and suggested that for consistency in both training and administration of the rule, the procedure should remain global. Commenters advised that CPT code 76000 is a radiological procedure, which would only be performed in an ASC as a part of a more extensive surgical procedure, and should not be subject to ASC facility reimbursement. Commenter advised that most diagnostic or therapeutic items or services, such as this code, are considered inclusive of the ASC facility fee, and further noted that NCCI edits deem 76000 as global to over 700 other procedures. Commenter opined that radiological services that are not global to other procedures should remain reimbursable per §134.202.

RESPONSE: The commission declines to replace CPT code 76000 with CPT code 76005 or add CPT code 76005 to the commission's List. After full consideration of comments received and after researching the matter further, CPT code 76000, which was proposed to be added, (fluoroscopy) has now been deleted from the commission's List because it does not qualify as a surgical procedure and is a radiological code. Further, CPT code 76000 is noted as commonly miscoded according to the Ingenix 2004 CPT Expert, consequently, including only one fluoroscopic code is likely to encourage inappropriate coding in order to obtain additional reimbursement. Fluoroscopy is a service furnished by ASC staff in connection with a covered surgical procedure. The Medicare ASC reimbursement methodology includes in the group case rate, most diagnostic or therapeutic items or services (such as CPT code 76000). Additionally, Medicare HOPPS generally bundles fluoroscopic services with a more extensive surgical procedure. This means no additional reimbursement is provided for these procedures. Regarding commenter's opinion that radiological procedures should remain reimbursable according to §134.202, the commission clarifies that the proposed radiological procedure has been deleted from the adopted rule.

COMMENT: Commenters opposed the inclusion of any proposed surgical procedure not approved by CMS (Medicare) to be performed in an ASC setting, and advised such deviations compromise the CMS methodology as applied to Texas through §413.011 of the Act. Commenter further recommended that Medicare's determination be given presumptive weight. Commenter indicated Medicare's List prohibition was intended to discourage the shift of services from physician offices to ASCs, and commenter recommended the commission should also strive toward patient safety and prevention of shifting procedures to a different setting that results in greater reimbursement amounts.

RESPONSE: The commission disagrees that supplementing Medicare's List to meet Texas workers' compensation system needs negatively impacts the Medicare's List methodology. The additions to Medicare's List impact only a limited number of CPT codes, maintain the CMS criteria as presumptive weight for over 2400 CPT codes, and are intended to facilitate certain procedures that previously have been provided in an ASC setting. The commission disagrees that Medicare's List was only developed to discourage a shift of services from physician offices to ASCs, as the CMS methodology considers many other factors in modifying its list. The commission agrees that patient safety and quality care is a significant factor in the workers' compensation system. The additions to commission's List have previously been performed in the ASC setting, and were reviewed and approved for inclusion by the commission's Medical Advisor.

COMMENT: One commenter suggested inclusion/exclusion of procedures to the commission's List beyond what's on the current Medicare's List will become a recurring theme for the commission each time CMS updates their list or when health care providers demand further changes. Commenters additionally advised that CMS has an established procedure for timely updating their list, and CMS is required to do so every two years. CMS is currently in the process of an update for services provided on or after July 1, 2005.

RESPONSE: The commission disagrees that careful consideration of "minimal modifications" to the rule under §413.011 of the Act, with the public's input, is inappropriate in this rulemaking or would be inappropriate in the future. Each time CMS updates its list, the rule includes such updates as stated in paragraph (4) of subsection (a) of the rule. Further, the commission has a responsibility to abide by the statutory requirement of reviewing and, if necessary, revising its medical policies and fee guidelines. The commission believes that these amendments are needed now, given the uncertainty of content and timing for any pending changes to CMS.

COMMENT: Commenters observed that the rule as proposed would have the unintended consequences of unbundling Medicare's List as established by CMS for the sole purpose of seeking a higher reimbursement. Commenters recommended the commission adhere to and not modify CMS' scheduled updates and methodology, which prevents unbundling.

RESPONSE: The commission disagrees that the creation of a commission's List within the rule will result in the unbundling of procedures. Although members of the ASC Focus Group recommended additional reimbursement for some procedures currently bundled into a primary procedure code, the commission did not include any of these procedures in the commission's List. The commission does not encourage unbundling, and clarifies that the minimal modifications made to Medicare's List do not encourage inappropriate unbundling and subsequent overpayment.